[amp_mcq option1=”intrinsic preference” option2=”perpetuities” option3=”extrinsic preference” option4=”weak preference” correct=”option1″]<\/p>\n
The correct answer is: A. intrinsic preference<\/strong><\/p>\n Preferred stocks are a type of equity security that has a fixed dividend rate and, in most cases, a preference over common stock in the event of a liquidation. Preferred stocks are also known as preference shares or preferred equity.<\/p>\n Preferred stocks are classified as intrinsic preference because they have a fixed dividend rate that is paid out before any dividends are paid to common shareholders. This means that preferred shareholders have a higher claim on the company’s earnings than common shareholders.<\/p>\n Perpetuities are a type of security that has no maturity date and, therefore, pays dividends forever. Extrinsic preference is a type of preference that is not based on the company’s financial performance. Weak preference is a type of preference that is not as strong as other types of preference.<\/p>\n Here is a table that summarizes the key differences between preferred stocks and common stocks:<\/p>\n | Preference stock | Common stock | I hope this helps! Let me know if you have any other questions.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”intrinsic preference” option2=”perpetuities” option3=”extrinsic preference” option4=”weak preference” correct=”option1″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-47826","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"\n
\n| — | — |
\n| Has a fixed dividend rate | Does not have a fixed dividend rate |
\n| Has a preference over common stock in the event of a liquidation | Does not have a preference over common stock in the event of a liquidation |
\n| Is less risky than common stock | Is more risky than preferred stock |
\n| Is more liquid than common stock | Is less liquid than preferred stock |<\/p>\n